Liam Byrne: I absolutely agree with that point, which is not unrelated to that raised by my hon. Friend the Member for Hendon. Relying on existing published GovernmentWithin the framework of those five principles there is of course an enormous amount of detail, on which I look forward to hearing the House's views. statistics in this area is very difficult because those statistics do not go down to the level of specialism where shortages can emerge. We also need to acknowledge a geographical dimension to the question, as the availability of labour may be fairly sticky in some parts of the country. That is why the Migration Advisory Committee was asked to draw up a shortage occupation list for Scotland. There are two related problems: one is defining an occupation at a sufficiently detailed level in and of itself to understand whether it is skilled; but we also need to look, secondly, at bottom-up evidence for whether there is a particular shortage in a specific occupation. The chairman of the Migration Advisory Committee will thus need to look into movement in wage rates, as that might indicate a particular shortage in this area. The job cannot be done from a desk in the London School of Economics, where Mr. Metcalf is based. It is necessary to get out andWithin the framework of those five principles there is of course an enormous amount of detail, on which I look forward to hearing the House's views. compare the evidence in different regions in different parts of the country and in different industries.

Liam Byrne: I shall certainly try my utmost, although I may not get it right on every occasion. In creating the points system, we are trying to remove a degree of the instability which has bedevilled changes in the immigration rules over the past 40 or 50 years. We want a system that is more open, transparent, predictable and stable, and an end to policy changes that are not anticipated and are often retrospective.
	Although I believe that there will be a element of consensus on some of the basic policies, I also believe that we should be frank about the element that divides us. The cap which has been has been proposed does not constitute a limit on overall migration. According to the international passenger survey of 2006, 229,000 people entered the United Kingdom, about 77,000 of whomWithin the framework of those five principles there is of course an enormous amount of detail, on which I look forward to hearing the House's views. were returning British citizens. I am delighted that no Member so far has proposed to prevent British citizens from returning home. About 136,000 were European citizens. Again, I think that there is all-party support for the principle of free movement. It is a little-known fact that there have been some nine free movement directives since we joined the European Union. Seven were passed under Conservative Administrations and two under Labour Administrations. The 2004 directive was unopposed.
	Of the people who entered the United Kingdom during the period covered by the survey, 114,000 were students. We are now educating people from all over the world, and it is an important part of our economy, worth some £8.5 billion. Another 74,000 of the people who came in were dependants—and there is now a degree of consensus that we should not reintroduce the primary purpose rule, which this Government abolished in 1997. That leaves the number of non-EU citizens coming to this country to work, which the Office for National Statistics says is about 101,000. If we were to add in a reasonable share of their dependants, that would mean that about 140,000 people will be affected by the proposed cap. That is, of course, only about 30 per cent. of the non-British people who came in. In effect, therefore, the proposed cap is not really a cap at all; it is more of a colander.
	The number for the cap is a secret. The hon. Member for Mid-Sussex (Mr. Soames) has proposed that the net balance should be zero, whereas the hon. Member for Ashford (Damian Green) wisely said in  The Guardian a year or two ago that it would be wrong to speculate too far in advance on what the right number might be; I acknowledge his caution, and he is probably right.
	It would be helpful if Members of all parties made it clear that this cap would affect only, at best, 20 to 30 per cent. of the people who came into this country. When I look at these numbers, therefore, I see that there is probably more of a consensus in this House than a difference.

Damian Green: It is always enlightening to hear the Minister describe and defend the Government's immigration policies; as ever, the imperturbable was defending the indefensible. Before I go on to investigate the gaping chasm between the world and the immigration system described by the Minister and the world in which the people of this country live, I should express some sympathy for him, because he has an impossible job. I say that not because it is impossible to run an efficient immigration system in this country, although I do not underestimate the challenge, but because he must claim, as he did at the start of his speech, that everything that the Government are doing on immigration, such as the introduction of the points-based system, is a radical, once-in-a-generation change. He must do that without admitting that the need for the change is the failure of his Government's immigration policies over the past 10 years.
	The Minister's introductory remarks were the latest example of a faintly absurd level of hype that the Government attribute to every change they make in the immigration system. When the Home Secretary launched the points-based system, she said that it was
	"part of the biggest changes to British immigration policy for a generation."
	This afternoon, the Minister, perhaps outbidding his line manager, said that over the next year the Government will deliver the biggest shake-up of the immigration system for more than 45 years.
	I shall return to the detailed virtues and vices of the points-based system in a moment, but we must ask why this bad analysis is so prevalent. The problem is that in their early years, this Government adopted a policy based on a straightforward analytical fallacy: they said that immigration was good for the economy and therefore the more of it there was, the better it would be for the British economy. Many of the problems we face in immigration, strains on our public services and, worse still, community cohesion in this country, have their root in the faulty analysis that the Government adopted in their early years in power. The House of Lords report to which the Minister kindly referred pointed that out as well as anyone has done. It is worth thisWithin the framework of those five principles there is of course an enormous amount of detail, on which I look forward to hearing the House's views. House remembering that the report was produced by a cross-party House of Lords Committee containing Labour ex-Ministers, distinguished economists, such as Professor Richard Layard, and, indeed, Adair Turner, whom the Prime Minister employed as his adviser on pensions.
	Thus, the report cannot be dismissed. To do him credit, the Minister did not do so. He said that he thought that the analysis was good, but he took objection to some of the press coverage. I would be happy to ignore completely what the press made of the report, because the report itself was excoriating about the analysis that the Government apply to immigration and, in particular, about the policies that they have adopted. Indeed, rather gratifyingly, the distinguished cross-party Committee said that we needed precisely the cap for which I have been arguing, and against which the Minister has been arguing for the past 10 minutes.

Damian Green: Since we are all happily quoting the Lords report, I shall go along with the Minister and quote the report rather than the press reports. The report stated that
	"we have found no evidence for the argument, made by the Government...that net immigration...generates significant economic benefits for the existing UK population.
	OverallWithin the framework of those five principles there is of course an enormous amount of detail, on which I look forward to hearing the House's views. GDP, which the Government has persistently emphasised, is an irrelevant and misleading criterion for assessing the economic impacts of immigration on the UK. The total size of an economy is not an index of prosperity."